In consolidation of stamnt of proft or loss when there is an intra group (from parent to subsiadry) transfer of non current asset at gain to selle, what will be the adjusting double entries?
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Transfer of non current assets
11y ago#1Dr Seller's retained earnings
Cr TNCA
With the NET pup
The seller will have recognised the profit on the sale
The buyer will be charging depreciation on the transfer value that includes the profit - so charging too much depreciation so far as the group is concerned
So reduce seller's retained earnings by the profit on sale, but then increasecseller's retained earnings by the value of the extra depreciation that has been charged on the profit element
Have you watched the lectures / read through the course notes? It's all explained in there
What amounts will be charged to st of profit nd loss?
11y ago#3The NET pup will add on to cost of sales
(I assume that depreciation has already been charged calculated on the assets held by the two companies in the question)
Thank u for ur kind support.
11y ago#5You're welcome
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